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European stocks open sharply higher on Cyprus optimism; Dax up 1%

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Investing.com - European stocks opened sharply higher on Monday, as news that Cyprus secured an international bailout, preventing the country's exit from the euro zone, broadly supported market sentiment.

During European morning trade, the EURO STOXX 50 rallied 1.15%, France's CAC 40 surged 1.22%, while Germany's DAX 30 jumped 1%.

Market sentiment strengthened after euro zone finance ministers approved a EUR10 billion bailout for Cyprus that will see the closure of the country's second largest lender Laiki Bank and inflict heavy losses deposits of more than EUR100,000.

However, all bank deposits under EUR100,000 will be "fully guaranteed".

The head of the eurogroup of euro zone finance ministers, Jeroen Dijsselbloem, said the deal had "put an end to the uncertainty" around Cyprus's economy.

The deal ended a week of uncertainty after a previous agreement that included a levy on deposits in Cypriot banks was rejected by the country's parliament last Tuesday.

Financial stocks were broadly higher, as shares in French lenders BNP Paribas and Societe Generale rallied 2.70% and 2.78%, while Germany's Deutsche Bank and Commerzbank jumped 1.05% and 1.09% respectively.

Peripheral lenders added to gains, with Italian banks Intesa Sanpaolo and Unicredit advancing 1.39% and 1.90%, while Spain's BBVA and Banco Santander surged 1.64% and 2.15%.

Elsewhere, CSM soared 6.35% after agreeing to sell its bakery-supplies unit to Rhone Capital for about EUR1.05 billion.

In London, FTSE 100 climbed 0.60%, as U.K. lenders tracked their European counterparts higher.

Shares in HSBC Holdings added 0.18% and Barclays advanced 1.83%, while the Royal Bank of Scotland and Lloyds Banking rallied 1.69% and 1.95% respectively.

Mining giants BHP Billiton and Rio Tinto were also on the upside, rising 0.27% and 1.06%, while copper producers Xstrata and Kazakhmys jumped 0.76% and 1.15%

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.21% rise, S&P 500 futures signaled a 0.32% gain, while the Nasdaq 100 futures indicated a 0.38% increase.

Investors were looking ahead to a speech by Federal Reserve Chairman Ben Bernanke later in the trading day.

Last week, the U.S. central bank announced that it will leave monetary policy unchanged in spite of recent signs that the U.S. recovery is gaining traction.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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